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Stock Market Indices

Stock market indices are measures that represent the performance of a specific group of stocks or the overall stock market in a particular region or sector. These indices serve as benchmarks to assess the general direction and health of financial markets, providing investors with a snapshot of how a specific set of stocks or the market as a whole is performing. Several indices are widely followed globally, each serving a unique purpose.

One of the most well-known indices is the S&P 500, which represents the 500 largest publicly traded companies in the United States. Similarly, the FTSE 100 in the United Kingdom comprises the 100 largest companies listed on the London Stock Exchange, while the Nikkei 225 represents major stocks on the Tokyo Stock Exchange in Japan.

How are Stock Market Indices calculated?

Indices can be market-capitalization-weighted, price-weighted, or equally weighted. Market-cap-weighted indices, like the S&P 500, give more weight to larger companies based on their market capitalization. Price-weighted indices, such as the Dow Jones Industrial Average, consider the absolute stock prices of the included companies. Equally weighted indices assign the same weight to each stock, regardless of its market capitalization or price.

Indices are used as benchmarks

These indices are valuable tools for investors, allowing them to gauge the performance of a specific market segment, track trends, and make informed investment decisions. Investors often use indices as benchmarks to evaluate the performance of their portfolios against the broader market. Additionally, financial products like index funds and exchange-traded funds (ETFs) are designed to replicate the performance of specific indices, providing investors with diversified exposure to a market or sector without having to buy individual stocks.

Here are our guides to the world’s major stock market indices.

Stock market indices are influenced by a myriad of factors that collectively shape market movements. Some key factors include:

  1. Economic Indicators: Data on GDP growth, employment figures, inflation rates, and other economic indicators impact market sentiment.
  2. Corporate Earnings: The financial performance of individual companies within the index affects overall index movement.
  3. Interest Rates: Central bank decisions on interest rates can influence borrowing costs and corporate profitability.
  4. Geopolitical Events: Political instability, trade tensions, or geopolitical crises can cause market volatility.
  5. Investor Sentiment: Market perception, news, and speculation influence how investors buy and sell.
  6. Global Economic Conditions: International economic trends can impact multinational companies within the index.
  7. Government Policies: Fiscal and monetary policies set by governments and central banks influence economic conditions.
  8. Market Liquidity: The ease with which assets can be bought or sold impacts index movements.
  9. Technological Advances: Technological developments can affect industries and companies, influencing index performance.
  10. Natural Disasters: Events like hurricanes or earthquakes can impact specific industries or regions.
  11. Currency Fluctuations: Changes in exchange rates can affect the competitiveness and profitability of multinational companies.
  12. Market Speculation: Traders’ perceptions and speculative activities can drive short-term fluctuations.

Understanding these factors and their interplay is crucial for investors and traders to make informed decisions. It’s important to note that the stock market is dynamic, and multiple factors can contribute to its movements simultaneously. Investors often use a combination of fundamental and technical analysis to navigate these complexities.

Trading equity indices involves buying and selling financial instruments based on the performance of a specific index. In order to gain exposure to your chosen stock market indices, you can use futures contracts, like E-mini S&P 500 (ES), E-mini Nasdaq-100 (NQ), or E-mini Dow Jones (YM).

Exchange Traded Products, or ETFs, can also be used to trade these indices, as well as CFDs or other Spread Bet products with individual brokers.

Each of these products can offer a great way for investors to proxy an entire market without having to buy individual shares.

Indices News & Insight

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 21st June
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 14th June
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 7th June
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 31st May
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 24th May
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 17th May
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 10th May
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 3rd May
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 26th April
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and Eurozone for the week of 29th March
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and Eurozone for the week of 22nd March
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 1st March
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 22nd February
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 15th February
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 1st February
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 25th January
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 18th January
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 21st December
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 9th November
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 2nd November
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 6th July
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 8th June
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 1st June
The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 6th April
Is the stage set for a Santa Rally?

Is the stage set for a Santa Rally?

The stage looks set for equities to grind higher into next year and continue climbing the “wall of worry”, supported by receding risks on the geopolitical front
Can I use artificial intelligence to trade biotech stocks?

Can I use artificial intelligence to trade biotech stocks?

Biotech seems like something of a niche sector, but one US developer has brought AI analysis to trading these stocks.
Global growth set to recover over the year ahead?

Global growth set to recover over the year ahead?

Kingswood Head of Research Rupert Thompson suggests that global growth will recover somewhat over the coming year following the easing in monetary policy and reduced trade worries
Are indicators pointing to an impending recession?

Are indicators pointing to an impending recession?

Recession indicators have been flashing over the past few months and investors are bracing themselves. But what does history tell us?
Stock investors smile the world over

Stock investors smile the world over

The US stock market is up nearly 20% in 2019, but how does that compare with equity markets around the world?
What’s happening this week in the US, UK and the Eurozone?

What’s happening this week in the US, UK and the Eurozone?

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 15th July
Emerging markets: BRICS in the same boat

Emerging markets: BRICS in the same boat

Having lead world economic growth for a number of years, the future for BRICS economies is looking less rosy as each faces the prospect of declining output
What’s happening this week in the US, UK and the Eurozone?

What’s happening this week in the US, UK and the Eurozone?

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 24th June
What’s happening this week in the US, UK and the Eurozone?

What’s happening this week in the US, UK and the Eurozone?

Spreadex analyst Connor Campbell looks at the macroeconomic picture and it's effect on the markets in the US, UK and the Eurozone for the week of 17th June  
You Say You Want to Leave the Union…?

You Say You Want to Leave the Union…?

Uncertainties over the UK’s plans to leave the European Union has generally stirred unease across global financial markets, central bank monetary policies, as well as economic growth prospects
Coutts identifies these investment opportunities for 2019

Coutts identifies these investment opportunities for 2019

Coutts, the wealth management firm has published a report identifying investment opportunities for 2019, despite the current global uncertainties
Watson’s Weekly: Italian budget, UK High Street and the Auto sector

Watson’s Weekly: Italian budget, UK High Street and the Auto sector

On the macroeconomic side of things, the EU rejected Italy’s proposed budget. Funnily enough, the Italians didn’t like this and…

Emerging Markets: Young demographics cannot be ignored

Emerging Markets: Young demographics cannot be ignored

Saxo Bank has published its Q4 2018 Quarterly Outlook for global markets. Against an uncertain backdrop, the Outlook offered some interesting…

We are clearly at a crossroads on many fronts

We are clearly at a crossroads on many fronts

Saxo Bank has published its Q4 2018 Quarterly Outlook for global markets. Over the coming days, The Armchair Trader will…

US carmakers suffer as tariffs and other headwinds take a toll

US carmakers suffer as tariffs and other headwinds take a toll

Ford, General Motors and other car manufacturers face perennial challenges
Fed policy uncertainties arise as Eurodollar futures flash yield curve inversion risk

Fed policy uncertainties arise as Eurodollar futures flash yield curve inversion risk

While the Federal Reserve is widely expected to hike interest rates at its upcoming monetary policy meeting, a host of…

Global Indices – What Just Happened?

Global Indices – What Just Happened?

Over the last ten days or so we have seen US equity markets whipsaw in 1000 point ranges without obvious…

Take our Survey for the chance to win an Amazon eGift voucher

Take our Survey for the chance to win an Amazon eGift voucher

In return for feedback to help us build on the progress we've seen in 2017, The Armchair Trader will be giving one lucky member a £50 Amazon Gift voucher
Morning Round-Up: TUI, US Dollar and Sterling

Morning Round-Up: TUI, US Dollar and Sterling

Holiday operator, TUI posts positive full year results while the Dollar has to deal with a shock win for the Democrats and this afternoon's Fed rate decision
Morning Round-Up: FTSE, Euro and US Equities

Morning Round-Up: FTSE, Euro and US Equities

Morning Round-Up: FTSE opens positively while the Euro is boosted by developments in Germany and US Equities continue to perform
US tax reform delay dents investor sentiment

US tax reform delay dents investor sentiment

Reports suggest the US Senate would delay implementation of tax cuts until 2019
Stock market news: FTSE rises on weaker Pound

Stock market news: FTSE rises on weaker Pound

The Pound's fall and strength of the Mining sector on commodities gains has helped boost the FTSE
Spanish Stocks lift the Ibex 35 as Catalonia crisis subsides

Spanish Stocks lift the Ibex 35 as Catalonia crisis subsides

With the political crisis in Spain subsiding, we look at how investors are reacting
Stock Market News: FTSE up 36 points in early trading

Stock Market News: FTSE up 36 points in early trading

Commodities stocks are boosting the UK stock market despite poor earnings from NEXT hampering the retail sector
FTSE recovers yesterday’s losses as BP impresses

FTSE recovers yesterday’s losses as BP impresses

The FTSE is up 16 points in early trading thanks in part to expectation beating results from BP
FTSE down as political tensions and the BoE interest rate decision loom

FTSE down as political tensions and the BoE interest rate decision loom

Political issues in Catalonia and a widely expected interest rate rise on Thursday dominate early trading
FTSE up despite Barclays profits slump

FTSE up despite Barclays profits slump

Barclays was the morning's biggest faller, having announced its 3rd quarter earnings before the session opened
FTSE flat this morning following the weekend’s political events

FTSE flat this morning following the weekend’s political events

The Japanese General Election and the political events unfolding in Spain aren't providing any real direction
FTSE up on BoE interest rate conundrum

FTSE up on BoE interest rate conundrum

Investor doubts about a UK interest rate hike following BoE comments yesterday halt the Pound's rise and boosts the FTSE
Low inflation providing a headache for US policy makers

Low inflation providing a headache for US policy makers

The Dollar in retreat as investors seeking a positive tone from policy makers, were left disappointed
UK Industrial and Manufacturing Production data in focus this morning

UK Industrial and Manufacturing Production data in focus this morning

The FTSE and Sterling await release of UK Industrial and Manufacturing Production data for today's direction
FTSE flat in early trading as the Pound recovers some composure

FTSE flat in early trading as the Pound recovers some composure

The Pound has arrested it's poor start to the beginning of October, taking 0.4% off the Dollar and 0.5% from the Euro
Could the NonFarm Payrolls release surprise investors today?

Could the NonFarm Payrolls release surprise investors today?

There are some indications that this month's US jobs report may be less bearish than analysts are expecting
Pound and FTSE in focus as investors eye UK Construction data

Pound and FTSE in focus as investors eye UK Construction data

Investors wait for UK Construction PMI data which, analysts forecast, will remain flat
A busy week of data releases ahead for investors to digest

A busy week of data releases ahead for investors to digest

October begins with a string of PMI reports from the UK and US data leading to the non-farm jobs report on Friday
US tax reform details maintain Dollar momentum

US tax reform details maintain Dollar momentum

The dollar has extended the gains it made yesterday after President Trump presented his tax reforms plans
Markets digest last night’s US Fed monetary policy

Markets digest last night’s US Fed monetary policy

The Federal Reserve is set to begin reducing its balance sheet and hinted at a further interest rate rise in 2017
Investors look towards this evening’s US rate decision

Investors look towards this evening’s US rate decision

The focus will be on the US Dollar today in light of the Fed's rate decision and Janet Yellen's press conference
Data releases from the UK and US set to dominate

Data releases from the UK and US set to dominate

UK Bank of England Governor, Mark Carney set to provide his monetary policy update while US Inflation and Earnings are released this afternoon
FTSE 100 down in early trading

FTSE 100 down in early trading

The FTSE is down around 20 points in early trading after a mixed US session developed into losses for Asian stocks overnight
Investors set to focus on the Euro today

Investors set to focus on the Euro today

The Euro will be in the spotlight leading up to the ECB Rate Decision meeting and Mario Draghi's press conference
North Korean nuclear crisis continues to dominate FTSE 100

North Korean nuclear crisis continues to dominate FTSE 100

The FTSE 100 is down 30 points in early trading as the North Korean nuclear crisis remains at the forefront of investors minds
European PMI data to provide direction this morning

European PMI data to provide direction this morning

Investors are set to focus on European PMI Services
Political tensions see investors turn to safe havens

Political tensions see investors turn to safe havens

Political tensions surrounding the Korean Penninsular are dominating direction of the financial markets this morning
The Jackson Hole Symposium main event to take place this evening

The Jackson Hole Symposium main event to take place this evening

Currency traders will be keeping a close eye on the Dollar and the Euro as both Yellen and Draghi are set to speak this evening
Political tensions and monetary policy to dominate this week

Political tensions and monetary policy to dominate this week

US and North Korea tensions re-emerge and the world's central bankers meet in Jackson Hole on Thursday
Positive earnings results lift the FTSE

Positive earnings results lift the FTSE

Positive news from Direct Line, Rolls Royce, Intertek, Centrica, Taylor Wimpey and BP provide the FTSE with a positive start, up 30 points in early trading
Investors look to this mornings Eurozone inflation figures

Investors look to this mornings Eurozone inflation figures

The Euro is likely to benefit should the Eurozone inflation prints beat expectations
Investors look to UK GDP reading and FOMC policy update

Investors look to UK GDP reading and FOMC policy update

Sterling and the US Dollar in focus as UK GDP and US Fed policy update set the tone
Corporate earnings to drive equities sentiment

Corporate earnings to drive equities sentiment

It's a big week for investors with corporate earnings across global markets likely to drive market sentiment
Investors’ buoyed by yesterday’s ECB meeting

Investors’ buoyed by yesterday’s ECB meeting

The ECB have allayed fears following investor concerns that the recent surge in the Euro's price would force a more negative tone
FTSE relatively unmoved in early trading

FTSE relatively unmoved in early trading

FTSE was relatively unmoved in early trading this morning following a positive Asian session and a mixed close on Wall Street
Investors set to focus on UK inflation

Investors set to focus on UK inflation

The FTSE was down 27 points in early trading and could be hindered further with UK inflation set to be in focus
European indexes off to a healthy start

European indexes off to a healthy start

A positive finish on Wall Street on Friday and a strong showing from Asian bourses has provided some early momentum